Techne Corp. (TECH, Financial) filed Quarterly Report for the period ended 2009-09-30.
Techne Corporation is a holding company which has two wholly-owned operating subsidiaries: Research and Diagnostic Systems Inc. and R&D Systems Europe Ltd. Research and Diagnostic Systems Inc. is a specialty manufacturer of biological products. R&D Europe distributes Research and Diagnostic Systems' biotechnology products in Europe. Its two major operating segments are hematology controls which are used in hospital and clinical laboratories to check the accuracy of blood analysis instruments and biotechnology products including purified proteins and antibodies. Techne Corp. has a market cap of $2.36 billion; its shares were traded at around $63.27 with a P/E ratio of 22.9 and P/S ratio of 8.9. The dividend yield of Techne Corp. stocks is 1.6%. Techne Corp. had an annual average earning growth of 18.9% over the past 10 years. GuruFocus rated Techne Corp. the business predictability rank of 5-star.
September 30, 2009 mainly as a result of decreased sales volume which the
Company attributes to continued customer caution in a time of economic
uncertainty and the exceptionally strong growth rate of 18.7% in the first
quarter of fiscal 2009. North American biotechnology sales to industrial
pharmaceutical and biotechnology customers declined approximately 12.8%
during the first quarter of fiscal 2010 compared to the same prior-year
period. Biotechnology sales to North American academic and Pacific Rim
distributors each grew about 3.9% and biotechnology sales in China grew 30.1%
during the first quarter of fiscal 2010 compared to the same prior-year
period.
R&D Europe net sales decreased $1.1 million (5.8%) for the quarter ended
September 30, 2009 from the comparable prior-year period. R&D Europe's net
sales increased 0.8% for the quarter ended September 30, 2009 when measured
at currency rates in effect in the comparable prior-year period.
Approximately 75% of R&D Europe sales are in non-British pound sterling
currencies (mainly Euro) which had a favorable impact on consolidated net
sales of approximately $1.2 million for the quarter ended September 30, 2009
as a result of the change in exchange rates used to convert sales in other
currencies to British pounds sterling. This favorable impact was offset by
an unfavorable impact on consolidated net sales of approximately $2.4 million
for the quarter ended September 30, 2009 as a result of the change in
exchange rates used to convert British pound sterling to U.S. dollars.
QUARTER ENDED
-
9/30/09 9/30/08
- -
Biotechnology 80.9% 81.0%
R&D Europe 53.5% 58.1%
Hematology 50.3% 44.2%
Consolidated gross margin 80.6% 81.1%
Consolidated gross margins, as a percentage of consolidated net sales,
decreased slightly from 81.1% for the quarter ended September 30, 2008 to
80.6% for the quarter ended September 30, 2009. This decrease was primarily
caused by unfavorable exchange rates.
Income taxes for the quarter ended September 30, 2009 and 2008 were provided
at rates of 32.6% and 33.4% of consolidated earnings before income taxes,
respectively. The U.S credit for research and development expired at the end
of calendar 2007 and was not renewed until the quarter ended December 31,
2008, resulting in a higher effective tax rate for the quarter ended
September 30, 2008. Foreign income taxes have been provided at rates that
approximate the tax rates in the countries in which R&D Europe and R&D China
operate. The Company expects its fiscal 2010 effective income tax rate to
range from approximately 32.0% to 33.0%.
The Company operates internationally, and thus is subject to potentially
adverse movements in foreign currency rate changes. Approximately 30% of
consolidated net sales are made in foreign currencies including 16% in euro,
7% in British pound sterling, 3% in Chinese yuan and the remaining 4% in
other European currencies. As a result, the Company is exposed to market risk
mainly from foreign exchange rate fluctuations of the euro, British pound
sterling and the Chinese yuan as compared to the U.S. dollar as the financial
position and operating results of the Company's foreign operations are
translated into U.S. dollars for consolidation.
Read the The complete ReportTECH is in the portfolios of Ron Baron of Baron Funds.
Techne Corporation is a holding company which has two wholly-owned operating subsidiaries: Research and Diagnostic Systems Inc. and R&D Systems Europe Ltd. Research and Diagnostic Systems Inc. is a specialty manufacturer of biological products. R&D Europe distributes Research and Diagnostic Systems' biotechnology products in Europe. Its two major operating segments are hematology controls which are used in hospital and clinical laboratories to check the accuracy of blood analysis instruments and biotechnology products including purified proteins and antibodies. Techne Corp. has a market cap of $2.36 billion; its shares were traded at around $63.27 with a P/E ratio of 22.9 and P/S ratio of 8.9. The dividend yield of Techne Corp. stocks is 1.6%. Techne Corp. had an annual average earning growth of 18.9% over the past 10 years. GuruFocus rated Techne Corp. the business predictability rank of 5-star.
Highlight of Business Operations:
Biotechnology net sales decreased $2.1 million (4.6%) for the quarter endedSeptember 30, 2009 mainly as a result of decreased sales volume which the
Company attributes to continued customer caution in a time of economic
uncertainty and the exceptionally strong growth rate of 18.7% in the first
quarter of fiscal 2009. North American biotechnology sales to industrial
pharmaceutical and biotechnology customers declined approximately 12.8%
during the first quarter of fiscal 2010 compared to the same prior-year
period. Biotechnology sales to North American academic and Pacific Rim
distributors each grew about 3.9% and biotechnology sales in China grew 30.1%
during the first quarter of fiscal 2010 compared to the same prior-year
period.
R&D Europe net sales decreased $1.1 million (5.8%) for the quarter ended
September 30, 2009 from the comparable prior-year period. R&D Europe's net
sales increased 0.8% for the quarter ended September 30, 2009 when measured
at currency rates in effect in the comparable prior-year period.
Approximately 75% of R&D Europe sales are in non-British pound sterling
currencies (mainly Euro) which had a favorable impact on consolidated net
sales of approximately $1.2 million for the quarter ended September 30, 2009
as a result of the change in exchange rates used to convert sales in other
currencies to British pounds sterling. This favorable impact was offset by
an unfavorable impact on consolidated net sales of approximately $2.4 million
for the quarter ended September 30, 2009 as a result of the change in
exchange rates used to convert British pound sterling to U.S. dollars.
QUARTER ENDED
-
9/30/09 9/30/08
- -
Biotechnology 80.9% 81.0%
R&D Europe 53.5% 58.1%
Hematology 50.3% 44.2%
Consolidated gross margin 80.6% 81.1%
Consolidated gross margins, as a percentage of consolidated net sales,
decreased slightly from 81.1% for the quarter ended September 30, 2008 to
80.6% for the quarter ended September 30, 2009. This decrease was primarily
caused by unfavorable exchange rates.
Income taxes for the quarter ended September 30, 2009 and 2008 were provided
at rates of 32.6% and 33.4% of consolidated earnings before income taxes,
respectively. The U.S credit for research and development expired at the end
of calendar 2007 and was not renewed until the quarter ended December 31,
2008, resulting in a higher effective tax rate for the quarter ended
September 30, 2008. Foreign income taxes have been provided at rates that
approximate the tax rates in the countries in which R&D Europe and R&D China
operate. The Company expects its fiscal 2010 effective income tax rate to
range from approximately 32.0% to 33.0%.
The Company operates internationally, and thus is subject to potentially
adverse movements in foreign currency rate changes. Approximately 30% of
consolidated net sales are made in foreign currencies including 16% in euro,
7% in British pound sterling, 3% in Chinese yuan and the remaining 4% in
other European currencies. As a result, the Company is exposed to market risk
mainly from foreign exchange rate fluctuations of the euro, British pound
sterling and the Chinese yuan as compared to the U.S. dollar as the financial
position and operating results of the Company's foreign operations are
translated into U.S. dollars for consolidation.
Read the The complete ReportTECH is in the portfolios of Ron Baron of Baron Funds.
